MNI China Daily Summary: Tuesday, December 31

MNI China Press Digest Dec 31: PBOC, Panda Bonds, EVs

MNI: PBOC Net Injects CNY93.6 Bln via OMO Tues

CHINA DEC MANUFACTURING PMI 50.1 VS 50.3 IN NOV

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MNI: China CFETS Yuan Index Down 0.13% In Week of Dec 27

MNI:US OCT FHFA HPI SA +0.4% V +0.7% SEP; +4.5% Y/Y

MNI: US REDBOOK: DEC STORE SALES +5.5% V YR AGO MO

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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GILTS: Open Rally Fades, Curve Steepens

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Gilts initially rally alongside core global FI markets, before a pullback from session highs was seen across the board.

  • Lower-the-expected PSNB ex-banking and weaker-than-expected retail sales data both marginal supports, although not gamechangers for markets/policy settings.
  • Futures as high as 92.48 before fading to 92.35.
  • ~6K of block trades in futures lodged after Thursday’s close, across 92.32, 34 & 35, looked like buyers with contract finishing at 92.24. DV01 ~GBP557K across the 3 blocks.
  • Bearish technical theme intact in the contract, initial support & resistance at yesterday’s extremes (91.87/92.84).
  • Yields 1bp lower to 2bp higher, curve twist steepens.
  • 2s10s & 5s30s set for the highest closes since August.
  • Gilt/Bunds ~1.5bp wider at 228.5bp. That comes after yesterday’s dovish BoE hold allowed the spread to tighten by ~3bp following a multi-decade closing high above 230bp.
  • Modest extension of the early dovish move in GBP STIRs. 66.5bp of cuts priced through ’25 vs. 64.5bp, SONIA futures flat to +4.0.
  • The BoE will announce its Q125 APF schedule at 16:30.
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Gilts initially rally alongside core global FI markets, before a pullback from session highs was seen across the board.

  • Lower-the-expected PSNB ex-banking and weaker-than-expected retail sales data both marginal supports, although not gamechangers for markets/policy settings.
  • Futures as high as 92.48 before fading to 92.35.
  • ~6K of block trades in futures lodged after Thursday’s close, across 92.32, 34 & 35, looked like buyers with contract finishing at 92.24. DV01 ~GBP557K across the 3 blocks.
  • Bearish technical theme intact in the contract, initial support & resistance at yesterday’s extremes (91.87/92.84).
  • Yields 1bp lower to 2bp higher, curve twist steepens.
  • 2s10s & 5s30s set for the highest closes since August.
  • Gilt/Bunds ~1.5bp wider at 228.5bp. That comes after yesterday’s dovish BoE hold allowed the spread to tighten by ~3bp following a multi-decade closing high above 230bp.
  • Modest extension of the early dovish move in GBP STIRs. 66.5bp of cuts priced through ’25 vs. 64.5bp, SONIA futures flat to +4.0.
  • The BoE will announce its Q125 APF schedule at 16:30.